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Cairn enters race for two Sri Lankan oil blocks

Shirish Nadkarni
OGJ Correspondent

MUMBAI, Mar. 7 -- Cairn India has bid on oil exploration Blocks 001 and 002 in Sri Lanka under the ongoing Sri Lankan licensing round and said it will undertake exploratory drilling in new areas in Rajasthan.

Block 001 in Sri Lanka is spread over 3,338 sq km, while Block 002 encompasses 3,572 sq km. The latter is near the Cauvery basin in India, where oil and gas already has been discovered, and it therefore is attracting bids from other international oil exploration companies as well.

"The chances of striking oil there are higher, as the geological features of the blocks are similar," said a Cairn India source.

In the contract area RJ-ON-90/1 in Rajasthan, Cairn Energy India Ltd., the operator on behalf of joint venture partners Cairn India and Oil & Natural Gas Corp. (ONGC), has decided to commence production activities and development drilling at Mangala field.

Drilling and completion activities will commence during the third quarter, while production from Mangala is scheduled to begin by 2009. Development drilling and production activities from other fields in Rajasthan will start in 2009.

Cairn Energy has invited expressions of interest from service contractors for development and exploratory drilling in Rajasthan. The primary term of the contract will be 3 years, with an optional extension period of 1 year each.

Cairn India said it will focus on both mature and relatively unexplored areas, undertaking operatorship of onshore and shallow water locations with selected partners.

"Our cumulative exploration expenditure on exploration between 2007 and 2009 is expected to touch 6 billion rupees ($150 million), the Cairn India source said.

"We will continue to renew exploration portfolios through licensing rounds, farmins, and trades and are currently reviewing the package in the seventh round of bidding under India's New Exploration Licensing Policy (NELP-VII)."


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